Friday, February 1, 2019

February 1, 2019 -- The Market -- The Best Of Times, The Worst Of Times

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.

EPD: nice article over at SeekingAlpha. Some data points:
  • just announced a $2 billion unit buyback program
  • its operating margin and leverage ratio improved materially last year
  • yields 6.3% which is considered very safe by the writer
And then, look at this:
It is possible that the company will once again boosting its payout by a serious amount by 2020 when its turnaround process will largely be completed, or it may prefer to instead allocate more cash flow to unit buybacks.
I continue to opine that the biggest disappointment I had with Apple, Inc, was not returning more of its $500 billion in cash to its shareholders. Yes, I know "everyone" says Apple's cash horde is only $250 billion but one can argue it is/was closer to $500 billion.

Market: I haven't followed the market since the current correction began a few months ago. I won't get back to the market to any great extent until the volatility moderates. I didn't check in at all for several weeks, but I am starting to check in every so often now that the worst seems to be over. Not necessarily the worst for the investor but the worst regarding the headlines. Fine distinction, I know. I continue to actively invest; I just don't pay as much attention to it as I used to, but with the earnings calls coming out regarding GE, AAPL, MSFT, FB, etc., things are starting to get interesting again.

Back to EPD, from the linked article. This is what excites me about the energy sector and investing. We are seeing similar results from many energy companies:
Last year, Enterprise Products grew its revenue by 25% year-over-year to $36.5 billion, while its operating income climbed by 38% to $5.4 billion. Even better, Enterprise Products' operating margin climbed from 13.4% in 2017 to 14.8% in 2018, indicating the firm is steadily becoming a more efficient and ultimately more profitable enterprise.
The firm's net income rose 49% year-over-year to $4.2 billion in 2018. That was more than enough to offset a marginal increase in its outstanding unit count as its earnings per unit climbed up to $1.91 last year, up sharply from $1.30 in 2017. Enterprise Products' average outstanding unit count grew by under 2% to just below 2.2 billion last year.
2019: could be a great year for energy investors. And, of course, perhaps not.

Fed: that's the biggest news. The tea leaves suggest Jay Powell doesn't want to be blamed for the coming recession. Or has that crazy talk ended. Haven't seen many recession headlines lately. [Update, March 22, 2019: Jerome Powell with string of Fed rate raises as soon as he got into office, what a doofus. "Everyone" knew that the US economy was not ready for a series of rate increases. This week, Powell admitted as much. Too late. Dow plunges 460 points on worries of recession. Thank you, Mr Powell.]

Google: recession January 2019 --
  • Italy falls into recession as eurozone economy struggles; I believe the Italian economy is the 4th largest in the EU; could be wrong; 
    • Italy slips into recession for third time in a decade
  • nine minutes ago: "clear risk of recession for UK manufacturing" -- The [London] Guardian
  • US: no recession signaled by iM's business cycle -- SeekingAlpha -- yesterday
  • recession odds spike to their highest in three years -- CNBC -- consider the source
  • expect a recession -- last hit, first page -- but look at the date -- March 7, 2018 -- one year later, no recession

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